The High Court’s Commercial Division in Kampala last week ruled that DFCU should pay $266,000) (roughly a billion shillings) to consulting firm, Real Marketing, over breach of contract.
The matter arose from a Shs 520 million loan acquired by Real Marketing from Global Trust Bank. The loan was DFCU inherited after the closure of GTB in 2014.
Justice David Wangutusi gave DFCU 30 days until April 19 from March 19, to pay the cash.
“Denying the plaintiff title for five years was to create a painful economic upset,” reads Justice Wangutusi’s judgment.
“In conclusion, judgment is entered in favour of the plaintiff … the defendant delivers the certificate of title for the suit land together with the transfer instrument within 30 days. In default of which they will refund Shs523, 550,000 (US$140,000).”
The court also awarded interest on the money of 30 percent, which reflects the commercial value of money since 2013 when the transaction was initiated.
Real Marketing bought 10 acres of land from Global Trust Bank. The title of the land was retained by the bank as a mortgage from defunct real estate dealer, Hossana.
Global Trust Bank had powers under the mortgage to sell the property without recourse to court if the money Hossana owed it was not paid.
Hossana defaulted and the bank moved to sell the land. Real Marketing paid partly by cash and partly borrowed the loan from the same bank to pay.
The agreement between Global Trust Bank and Real Marketing stipulated that upon completion of loan repayment, the bank would pass over vacant possession of the 10 acres.